United Technologies Corporation said Friday it received a second subpoena from the Securities and Exchange Commission that seeks information about potential payments by an agent in China that might have violated the Foreign Corrupt Practices Act.
Hartford, Connecticut-based United Technologies said it received the second subpoena on March 9.
The subpoena seeks “documents related to internal allegations of alleged violations of anti-bribery laws from UTC’s aerospace and commercial businesses, including but not limited to . . . businesses in China,” the company said.
The SEC issued its first subpoena in April 2014 when the agency notified the company of a formal investigation.
In late 2013 and early 2014, United Technologies made voluntary disclosures to the DOJ, SEC, and UK Serious Fraud Office.
The company reported “the status of its internal investigation regarding a non-employee sales representative” retained by United Technologies and a partner, IAE International Aero Engines AG, for the sale of engines and aftermarket services in China.
In June 2012, a Canadian subsidiary of United Technologies pleaded guilty to violating the Arms Export Control Act and making false statements in connection with illegal exports to China.
The contraband included U.S.-origin military software used in the development of China’s first modern military attack helicopter, the Z-10.
United Technologies and two subsidiaries paid more than $75 million in a global settlement with the DOJ and U.S. State Department. About $21 million went to the DOJ and $55 million to State.
The DOJ charged the two subsidiaries with violating the Arms Export Control Act and making false statements to the U.S. government in their belated disclosures relating to the illegal exports.
United Technologies Corporation trades on the New York Stock Exchange under the symbol UTX.
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Here’s the full FCPA disclosure from the Form 10-Q (Quarterly Report) filed by United Technology Corporation with the SEC on April 24, 2015:
As previously disclosed, in December 2013 and January 2014, UTC made voluntary disclosures to the United States Department of Justice (DOJ), the Securities and Exchange Commission (SEC) Division of Enforcement and the United Kingdom’s Serious Fraud Office to report the status of its internal investigation regarding a non-employee sales representative retained by United Technologies International Operations, Inc. (UTIO) and IAE for the sale of Pratt & Whitney and IAE engines and aftermarket services, respectively, in China.
On April 7, 2014, the SEC notified UTC that it was conducting a formal investigation and issued a subpoena to UTC. UTC continues to cooperate fully with the investigations and has responded to requests for documents and information.
The DOJ and SEC also continue to request information, and the SEC issued a second subpoena on March 9, 2015 seeking documents related to internal allegations of alleged violations of anti-bribery laws from UTC’s aerospace and commercial businesses, including but not limited to Otis businesses in China.
Because the investigations are ongoing, we cannot predict the outcome or the consequences thereof at this time.
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.